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As the Self Assessment deadline approaches in January, HMRC is facing yet more problems with delays to its service.

A detailed report in The Times at the end of November said taxpayers can expect ‘more chaos as the Self Assessment tax deadline looms’.

So what’s the problem, and what does this mean for filing your tax return on 31 January?

Thousands could miss January deadline

They are currently very long waiting times for those trying to contact HMRC. The service has been repeatedly under strain lately, with people experiencing delays when trying to speak to the tax office by phone, post and email.

According to the Institute of Chartered Accountants in England and Wales, thousands of newly self-employed people will miss the 31 January deadline because of HMRC delays in processing requests for their tax codes.

First-time taxpayers may face challenges

Everyone going through Self Assessment needs a UTR (unique taxpayer reference number).

If this is your first year being self-employed then you’ll need to request your tax number and wait for HMRC to send this out by post.

The strains on the service mean that there are long delays in getting the UTR’s delivered to first-time taxpayers.

What’s causing the HMRC delays?

While we’re often hearing stories of people having to wait a long time to get through to HMRC, the problem has clearly worsened during the global pandemic that is COVID-19

A report in the I Newspaper revealed there were long delays in processing tax rebates earlier this year – an issue that HMRC puts down to ‘managing furlough payments’ and the ‘increased workload related to Brexit’.

Yet despite furlough ending back in September, the service is still feeling the pressure.

What can taxpayers do?

If you’re newly self-employed, make sure you follow these steps as soon as possible:

Your UTR number is usually sent out within 10 days (and 21 days if you’re abroad) of registering with HMRC. However with the continuing delays to HMRC’s services, this process could take much longer.

While there’s not too much you can do to avoid the delays, one thing you can do is be organised and get your registration in promptly.

You’ll need your UTR number to complete your Self Assessment by the end of January, so make sure you register for Self Assessment now if you haven’t already.

Find out more about how to register if you’re self-employed on the UK government website.

HMRC Announce Flexibility for 2021 Self Assessment Tax Returns

Like last year, the deadline remains the 31st January 2022 but penalties will not be issued provided that the return is with HMRC by 28th February 2022

Self Assessment timeline:

  • 31 January – Self Assessment deadline (filing and payment)
  • 1 February – interest accrues on any outstanding tax bills
  • 28 February – last date to file any late online tax returns to avoid a late filing penalty
  • 1 April  last date to pay any outstanding tax or make a Time to Pay arrangement, to avoid a late payment penalty
  • 1 April  last date to set up a self-serve Time to Pay arrangement online

There is no change to the filing or payment deadline and other obligations are not affected. This means that:
interest will be charged on late payment.

The late payment interest rate is 2.75%.

Tax Returns received online in February will be treated as a return received late but with a valid reasonable excuse for the lateness.

A 5% late payment penalty will be charged if tax remains outstanding, and a payment plan has not been set up, by midnight on 1 April 2022.

Further late payment penalties will be charged at the usual 6 and 12 month points (August 2022 and February 2023 respectively) on any outstanding tax liabilities where a payment plan has not been set up.

The last year has been tough on a lot of us and while this is brilliant news for a lot of businesses, we understand you may have now put doing tax returns back to the bottom of the list.

Jaccountancy strongly recommend that instead of popping it back to the end of your list, get it ticked off! 

You still have to get it sorted after all, and once it is done,
you can relax and carry on with making 2022 your best year yet.

But what’s better for you, is that we now have more capacity to help even more businesses due to this extension!
That’s why we are extending our deadline for new client enrolment up to 31st January!

Want to know more… book a no obligation meeting with us here!”